Canadian IT Job Market – Quarterly Outlook October 2008

The IT labour market for Western Canada in the third quarter was similar to last year in the sense that individual contractor billing hours were down due to contractors taking well-deserved vacations, as well as several large companies shortening their summer work weeks. Additionally, much like last year, client projects pushed right through the summer months, so for those contractors wishing to put in the hours, the work was available.

The exception was the Winnipeg and Edmonton markets, which both had extremely low requirements for IT professionals in August. In September, however, both these cities, along with the rest of the West, experienced a spike in activity. In Calgary, this was due not only to people refocusing with summer finished and children back to school, but also as a result of continued strong demand for Oil and Gas, and the huge kickoff of several IT initiatives.

Across the West, there was a noticeable increase in the demand for full time hiring within the IT job market and several organizations have attempted to fill vacancies with Contract-to-Hire deals which have been met with mixed success. Overall, unlike in Eastern Canada, the Western business climate was not negatively affected by the strength of commodities. It will, however, be interesting to watch the impact of the recent melt-down in global commodity prices (with Oil dropping below $90/barrel).

Hot skills across the West over the past quarter included Oracle Developers, DBAs, and Testers in Victoria; Biz Talk, Interwoven, and Open Text in Vancouver; PMs, BAs, .NET, and infrastructure/networking professionals in Edmonton; PMs and BAs (across all areas of specialty) in Calgary; and Developers, QA/Testers, BAs and IT support technicians in Winnipeg.

At this time last year, Canada was enjoying a 33-year low in unemployment with a rate of 5.9%, which, according to Stats Canada, has now risen to 6.1%. According to a recent Jobboom study, September was the Greater Toronto Area’s (GTA) ninth weakest employment month in 10 years, following the loss of 45,600 jobs over 3 months, across all industries. More specific to IT, the GTA is similar to other regions across Canada as it continues to have increased employment demands specific to certain skills, while others are experiencing slow-downs.

Showcase Ontario took place this past quarter and technology suppliers had the opportunity to present their services to Government of Ontario clients. IT contracts, however, are still lagging as companies wait for the Ontario government to issue the new Vendor of Record (VOR). A number of ministries are finding their way around the lack of a contract vehicle through other hiring processes but these are more complex and expensive, resulting in fewer opportunities for IT contractors. The banking sector, feeling the hit from global economic events, is also seeing a slowdown in Toronto, while there is still healthy demand for consultants in other industries.

The entire IT industry is seeing a shift to more full time opportunities and many organizations in the GTA, like other parts of the country, are putting out contracts with the intent of offering full-time positions at the end of the term. Many contract consultants are becoming more accepting of these permanent jobs, potentially because of the economic slowdown or simply because they are at a stage in their life where they are seeking more stable employment. Other IT professionals are continuing to leave the Toronto area to seek contracts in other areas of the country – a trend causing some discomfort among hiring managers in the area.

Overall, there has been an increase in both application and infrastructure projects and hiring managers are seeking more senior resources in both the technical and functional capacities, as well as specialists for each role. Hot skills this quarter seem to be a mix and include: BAs, QAs, Developers and Technical Support, Java, .NET, Oracle, SAP, and PeopleSoft. Certifications and knowledge of methodologies also still remain very relevant in today’s marketplace.

As Eastern Canada markets grapple with the recent barrage of disturbing, and in some cases astonishing, economic news emanating largely from south of the border, predicting what effect the American Financial markets crisis and resulting US (Canadian?) recession will have on our technology sector in Canada, and moreover to other verticals and regions in Canada, has proven difficult. Of certainty, however, is predicting it is a fool’s game; hands up all those who saw veritable Wall Street behemoths Lehman Brothers and Bear Stearns would or even could go bankrupt. What we clearly now know is that the US is likely in a long and deep recession and that our economy, although fundamentally in a more sound state of affairs, will bear some ill effects as demand for our resources and other manufactured goods softens.

The late summer months and early fall in Eastern Canada can be best described as a mixed bag, with no clear or definitive indication which way demand will fall in months ahead. For instance, in Quebec, the markets saw a continued demand for permanent positions in the Financial Services/Banking sector with some significant US-based presence while at the same time, there was a large outsourcer lay off in significant numbers. Overall, however, the Montreal market continues to be very active, mostly due to the overall shortage of IT workers continuing to fuel that demand, a trend also quite visible in Quebec City. Hot requirements in Montreal of late include: Oracle Financials resources, Technical Architects, Web Developers, and SAP resources.

In Ottawa, the summer vacation months and the early fall election have both served to slow what had been a fairly consistent, if not hot, market. Continued requirements for longer term projects and initiatives in the government were still in need, however, net new projects, many in the planning stages, were set aside when contract procurement and any subsequent contract awards came under severe scrutiny for fear of potentially becoming election issues. Many government clients anticipate a big increase in contract requirements being issued as the election concludes, and if a majority is returned, expectations are for some very significant projects requiring substantial IT and IM components to be rolled out. As rates and salaries have softened in Eastern Canada, there was a continued steady stream of contractors heading out to, or remaining in, Western Canada as the oil patch continues to represent the best bet for employment.

Hot skills and technologies that continue to be in demand in the East include: Developers in both .NET and Java, Oracle Developers, ETL and BI resources as well as QA Testers, BAs, and, as always, Senior PMs – particularly on the infrastructure side.